Rental Housing  in the Czech Republic

Rental Housing in the Czech Republic PowerPoint PPT Presentation


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Rental Housing in the Czech Republic

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1. Rental Housing in the Czech Republic

2. Housing tenure structure

3. Household expenditures on housing (% of incomes)

5. Rent distortions “Price ceiling“ had been obligatory applied to all “old“ lease contracts (more than seventeen years); since 2003 it is possible to change rents (even in “old“ leases) according to negotiation between the tenant and landlord (following local demand and supply) = “quasi-market“ segment (about 750,000 flats). Rents in vacant flats have depend on the free agreement since 1994 = market segment (about 150,000 flats). Therefore – two levels of rents (regardless the social status of a given tenant).

6. “Price scissors“ Still two levels of rents …

7. “Closing the gap“

8. Act on One-sided Rent Increase Approved in 2006. An agreement has preference because lease is contractual relationship. If not, the landlord is entitled to increase rent for a given flats, but only according to the formula included in the Act (= reform steps; by 2010). Aim = to reach the level of 5% of average regional level market price for “older flats“ (built before 1993). Two biggest cities (Prague, Brno) are divided into several parts. For the centre of Prague, the aim is to reach less than 5% (2.6%-4%).

10. Decision N 343/2005 CZ Renting = economic activity = undertaking. European Court of Justice in case C 41/90: “the concept of undertaking encompasses every entity engaged in an economic activity; regardless of the legal status of the entity and the way in which it is financed“.

11. Decision N 343/2005 CZ EC observes that the renting of the residential accommodation is to be considered as an economic activity, which any owner (including municipalities, non-profit organizations – i.e. any legal or natural entity) perform in competition and on intra-EU trade. Therefore, public support for the renewal of residential buildings owned by „anybody“ (including municipalities …) would be considered as State aid.

12. New steps in Czech rental housing?

16. Thank you for your attention. [email protected] www.mmr.cz

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